Peter Jackson’s Weta Digital purchased by Unity Software for $1.6 billion.

Unity announced intentions to buy visual-effects company Weta Digital’s tools and technology for $1.63 billion in cash and stock, with $755.4 million in cash and cash equivalents on hand at the end of the quarter.

The New Zealand-based firm, which is led and co-founded by Peter Jackson, has worked on films including “The Lord of the Rings” and “Avatar,” which Jackson directed. The deal is expected to finalise in the fourth quarter, according to Unity.

Unity, which competes with Epic Games Inc.’s Unreal Engine, posted a loss of $115.1 million, or 41 cents per share, in the third quarter, compared to a loss of $144.5 million, or 97 cents per share, in the previous quarter. The adjusted loss was 6 cents a share, compared to a loss of 9 cents a share a year ago.

Weta Digital is being purchased by Unity Technologies, the firm behind the Unity technology. You don’t need an introduction to Weta if you’re a movie enthusiast. It’s the visual effects studio that Peter Jackson co-founded in 1993. It has worked on films such as Lord of the Rings, Avatar, and Black Widow. Unity will acquire the company’s technology segment, including artist tools and engineering staff, for $1.625 billion.

Weta’s visual effects and animation departments will form WetaFX, a distinct company in which Peter Jackson will retain a majority ownership. Regulatory approval is expected before the end of the year, and the deal is likely to close by the end of the year.

Weta’s technology package includes, among other things, tools for facial animation, building virtual cityscapes, and modelling object deformation. Unity intends to not only integrate those apps into the Unity Engine, but also to make them available as part of a cloud-based subscription service in the future. Many of the assets built by Weta Digital over the years will eventually make their way into the engine, allowing anyone with Unity access to use them.